Hour photo / Erik Trautmann Keith Phaneuf, State Budget Reporter at The Connecticut Mirror and one of the featured panelists in the Greater Norwalk Chamber of Commerce presentation, Connecticut State Budget: Fact and Fiction, speaks at the Norwalk Inn Tuesday morning.

Hour photo / Erik Trautmann Keith Phaneuf, State Budget Reporter at The Connecticut Mirror and one of the featured panelists in the Greater Norwalk Chamber of Commerce presentation, Connecticut State Budget:

Hour photo / Erik Trautmann Julie McNeal, CPA and director of finance and operations for the Connecticut Society of CPAs and one of the featured panelists in the Greater Norwalk Chamber of Commerce presentation, Connecticut State Budget: Fact and Fiction, speaks at the Norwalk Inn Tuesday morning.

Hour photo / Erik Trautmann Chamber member Winthrop Baum asks questions of the panelist during the Greater Norwalk Chamber of Commerce presentation, Connecticut State Budget: Fact and Fiction, at the Norwalk

NORWALK -- The state budget isn't wearing any clothes at all and it is time somebody said something.

That was the message delivered by a panel of experts Tuesday morning as the Greater Norwalk Chamber of Commerce held a "Connecticut State Budget: Fact or Fiction" program at the Norwalk Inn and Conference Center. A great portion of the problem lies within the contractual agreements with state employee unions, paying for state employee pensions, and declining state income tax revenue, the panelists said.

The news was somber as Julie E. McNeal, director of finance and operations for the Connecticut Society of CPAs, and Keith Phaneuf, a journalist with the Connecticut Mirror peppered the audience with statements such as: "These numbers are going to sound made up. It's scary;" "We're paying interest on interest;" "We've slipped into denial mode;" and "The state is insolvent and will be involvent for years."

State Comptroller Kevin P. Lembo certified a nearly $220 million general fund deficit last week for the fiscal year that ends June 30, according to the Connecticut Mirror, a nonprofit, nonpartisan online news source. The number swells to $266 million says the legislature's nonpartisan Office of Fiscal Analysis, the Mirror reports.

"I don't see anything on the horizon other than a decade and a half of deep cuts, tax increases and other sacrifices," Phaneuf said. "I think that's why GE left."

Phaneuf said Connecticut's state pension debt per capita is three-and-a-half times greater than the national average. Connecticut and Illinois comprise 40 percent of the nation's state pension debt per capita. Worsening the situation is that Connecticut is contractually obligated to pay the pensions and benefits. Most states do not have such contracts and the agreements can be amended in court. In Connecticut, the vast majority of the pension commitments are for people who are already retired.

"Eighty-two percent has nothing to do with existing state employees. We are bordering on becoming a national outlier," Phaneuf said. "Up until 1984 we put no money into funding the pension. From 1984 to 2010 we started to contribute but not enough."

He said based on his more than 20 years experience covering the state budget, it looks as if Connecticut may be heading toward another recession. Tax increases and service cuts could continue until 2022 to fulfil the obligations to state employees, he said.

McNeal feels a legal battle is looming as states can not file for bankruptcy.

"It starts with a recognition of the problem," McNeal said. "It's not a Democratic or Republican issue. It's a health of the state question. In the time period from 2002 to 2015, 2006 was the only year that the state took in more money than it spent. Just because you have a balanced budget that doesn't mean that's a way to sustainably spend money. A lot depends on political will."

State lawmakers at the event were Reps. Fred Willms, R-142, Gail Lavielle, R-143, Tom O'Dea, R-125, and Jonathan Steinberg, D-136. After a comment from the audience alleged that some state politicians were unaware of the gravity of the problem, Lavielle and Wilms requested time to speak.

"These problems are hard to miss. They are staring us in the face all the time," Lavielle said. "The question isn't: Are legislators informed? It is: Do they have the political will to do anything about it? The public needs to know about this."

Lavielle wondered aloud whether some lawmakers who have many state employees living in their district are more concerned with short-terms concerns to keep constituents happy or "doing what's right" and addressing the state budget woes.

Wilms added: "All 151 (lawmakers) in the House and 36 in the Senate are smart and well-informed individuals. But many legislators are in denial. They have an ideological mindset that the solution is to raise taxes on rich people in the state."

Wilms also questioned lawmakers who favored a new contract that includes a 4.5 percent raise for each of the next five years for non-teaching professionals at the University of Connecticut while at the same time social services in the state are facing severe funding cuts.

"We are eviscerating social services in the state," Wilms said. "The fabric of our society is being torn to shreds."

The union representing the UConn workers has since withdrawn the contract proposal after Gov. Dannel Malloy called on legislators to reject it. Malloy also recently suspended $140 million in payments to state hospitals.

State Senate Majority Leader Bob Duff, D-25, reached after the event by The Hour, said the state's budget woes regarding state employee pensions began in the 1980s when the contract was approved.

"Some of the budget issues we are paying for are past sins. We're now paying for the debt and compounded (interest) of something that was agreed to when I was in middle school," Duff said. "My long-term goal is to make structural changes in the budget, pay down debt and continue to create jobs for middle class families."

The event, offered free by the Greater Norwalk Chamber of Commerce, drew about 75 members representing a wide range of industries. Edward Musante, president and CEO of the Greater Norwalk Chamber of Commerce, said he was happy with what the panelists shared.

"We were trying to provide information to our members and the business community in general about not just the magnitude of (budget) problems they hear about every day, but also the tremendous post-employment benefit liability," Musante said. "A lot of numbers are thrown around and we wanted our members to get some factually based numbers in a nonpartisan manner."